The early embryo of the frog Xenopus provides a favorable system for discovering the molecular mechanisms that control cell signaling and differentiation. When an embryo is cut in half, it can self-regulate to form a well-proportioned organism. Recent experiments have elucidated that self-regulation is mediated by a novel extracellular biochemical pathway. Signaling by the BMP family of growth factors is antagonized by a dorsal protein called Chordin. Chordin is degraded by a ventrally-expressed zinc metalloproteinase of the Tolloid family. In turn, this protease is inhibited by a ventrally secreted Frizzled-Related Protein (sFRP). Here we propose to investigate cell-cell signaling by exploring three broad questions: 1) How do cells in the dorsal and ventral poles of the embryo communicate with each other across long distances? Our hypothesis is that secreted molecules of similar biochemical activity expressed at opposite poles of the embryo, but under opposite transcriptional control, provide the key to understanding how developmental fields of differentiating cells self-regulate. 2) Are other sFRPs inhibitors of zinc metalloproteinases? The hypothesis to be tested is that Frizzled domains, which are present in many extracellular proteins, might provide a module that regulates the proteolysis of extracellular molecules, perhaps under the control of Wnt growth factors. 3) How are multiple growth factor signaling inputs integrated intracellularly? We will test whether the BMP, Wnt, and Receptor Tyrosine Kinase signaling pathways converge on the phosphorylation state of the transcription factor Smadl, regulating its activity. Investigating these three specific aims will help provide an integrated view of how cells communicate with each other, not only in embryos but also in adult tissues and in human embryonic stem cells. Genes in the signaling pathways to be studied are involved in many processes of medical relevance, such as central nervous system induction, cell and tissue differentiation, the formation of identical and conjoined twins, neural induction, fibrotic and connective tissue disease, and cancer. [unreadable] [unreadable] [unreadable]